Increased School Funding Can Be Accessed Through Academic Gains

Chad Miller

Over the past decade, states across the country have found themselves mired in litigation over issues of adequate school financing. Texas has made headlines when the state’s high court ruled the system to be flawed but constitutional, despite the 600 Texas school districts crying foul over the antiquated and disproportional school funding formula. The ruling, while requiring no mandate for change, added pressure for state lawmakers to seek an equitable way to increase and distribute funding for schools.

Solutions to the school finance problems require political consensus and policymakers who are willing to evaluate how funding formulas effect the state as a whole rather than their individual district. Moreover, solutions often require increased spending. In Texas, experts who testified in the school finance case estimated it could take an additional $6 billion to make the finance system both adequate and equitable. Unfortunately for Texas, the state is drifting in the wrong direction and away from a plausible solution.

From 2011 to 2015 average scores on the National Assessment for Education Progress (NAEP) for 8th grade math decreased from 290 to 284, a two percent slide. The American Action Forum, a Washington, D.C. based think tank, recently examined the relationship between Texas’ average 8th grade NAEP scores and economic growth rates, job growth rates, and tax revenue growth rate. Over the 10-year window between 2003 and 2013, AAF found that a ten percent improvement in NAEP scores in 2003 would have yielded significant gains in all of those indicators. Specifically, an additional $113.3 billion in economic growth, over 1 million additional jobs, and $5.3 billion in additional tax revenue – funds that could have been used to improve school funding.

These findings are not unique. Researchers from the U.S. Bureau of Economic Analysis (BEA) to the Organization for Economic Co-operation and Development (OECD) have produced similar research linking economic growth to educational achievement. Eric Hanushek, a Stanford University economist, has long researched the relationship between educational achievement and economic growth. Recently, he applied a similar methodology to assess the relationship between NAEP test scores and long-run economic growth finding that an increase in NAEP scores was associated with a 1.4 percentage point increase in the average annual economic growth rate.

When states bolster their students’ academic gains they can expect to reap the economic benefit. The Texas legislature should take note of these findings and focus on improving academic achievement. Strong economic growth and increased employment provide states with a more significant tax base to fund priorities without over-burdening taxpayers. Educational standards aren’t just good for students, they’re good for employment, the economy, and Texas’ fiscal health.